Pakistan has paid a colossal amount of $1.190 billion as repayment of loans to various international agencies and development& commercial banks in merely two weeks.
According to the statistics of State Bank of Pakistan (SBP), the country repaid the amount of $347 million, $364 million and $479 million separately from May 4 , May 8 and May 18 on the account of debt-servicing (interest plus the principal amount of loans).
The consistent repayment of huge amount caused steep depletion of foreign exchange reserves, which declined to alarmingly level of $16.65 billion.
Meanwhile, the country received external loans during the period piling up the burden of external loan. The external loans of the country reached $91.8 billion by end of March 2018.
The foreign exchange reserves maintained by central bank stood at $10.32 billion. On the contrary, the reserves of foreign exchange maintained by private banks grew by 0.208 billion to stand at $6.33 billion.
According to SBP, the liquid FX reserves saw a net reduction of US$ 5.8 billion to reach US$ 10.3 billion as of 18th May 2018. Reflecting the increasing pressures in the external sector, PKR has depreciated by 9.3 percent against the USD up till 24th May 2018. The near-term sustainability of prevailing higher current account deficit critically depends on the realization and further mobilization of financial flows.
The overall foreign exchange situation is believed to be less than three months of the imports bill of the country despite the government borrowed $1.2 billion from Chinese banks last month.
However, the government through central bank extended the currency swap agreement with China to help ease off the pressure on foreign exchange reserves.